Latest / Money In Motion with Klaas Financial / Tax Prep Tips

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Tax Prep Tips · Money In Motion with Klaas Financial

0:00
Speaker 1: Join this morning by our retirement planning professionals from Class Financial, CJ.
0:04
Speaker 2: Closs and Eric Schwartz.
0:05
Speaker 1: You can learn more about Class Financial on their website.
0:09
Speaker 1: That's Clossfinancial dot com. That's Class k l a as
0:13
Speaker 1: Financial dot com. Great website again to learn more about
0:16
Speaker 1: Colss Financial, the team at Class Financial, the separate divisions.
0:19
Speaker 1: You can also sign up for the weekly Market Pulse
0:21
Speaker 1: newsletter all at Clossfinancial dot Com. Telephone number remember this
0:25
Speaker 1: one six oh eight four four two five, six three seven.
0:28
Speaker 1: Don't forget no charge for that initial gets to know
0:30
Speaker 1: you appointment at Loss Financial. It will be complementary to
0:33
Speaker 1: you again their number six oh eight four four two
0:35
Speaker 1: five six three seven. If you'd like to join the
0:37
Speaker 1: show this morning, tell for number to get on the air.
0:39
Speaker 1: Six oh eight three two one thirteen ten. That's six
0:42
Speaker 1: oh eight three two one thirteen ten and joining us
0:44
Speaker 1: this morning our CJ. Closs and Eric Schwartz. CJ, how
0:47
Speaker 1: you doing this week?
0:49
Speaker 3: I'm doing great. Good morning, Sean, Good morning, good to talk.
0:51
Speaker 2: With you and Eric. How have you been.
0:54
Speaker 4: Pretty good? Sean? It's it's Thursday and sunshine and can't complain.
1:00
Speaker 1: Next week I'm seeing in the forecast two guys, so
1:02
Speaker 1: it should be it should be a nice one for sure,
1:06
Speaker 1: and we're going to talk as we're looking into spring,
1:08
Speaker 1: and of course seasonally this time of year, a lot
1:11
Speaker 1: of folks taxes are going on, and we're going to
1:13
Speaker 1: get some getting our taxes in order, specifically planning for
1:18
Speaker 1: next years and years beyond. I think a lot of
1:20
Speaker 1: folks start to feel the frustration this time of year
1:23
Speaker 1: with their taxes. You can do yourself a huge favor
1:26
Speaker 1: by doing some planning right now for the years to come.
1:28
Speaker 1: And we'll talk with CJ and Eric about just that
1:31
Speaker 1: this morning. Another great feature of the program is of
1:34
Speaker 1: course the clost Quiz. Question the week your chance to
1:36
Speaker 1: win a fantastic prize. This week, no exception, our friends
1:39
Speaker 1: from Class Financial have provided a twenty five dollars gift
1:42
Speaker 1: card to the Darden. Darden restaurants and those are like
1:46
Speaker 1: Olive Garden Season fifty two Yardhouse those places. So listen
1:51
Speaker 1: closely to the program because again the question and answer
1:53
Speaker 1: typically come up during the show. Before we actually get
1:56
Speaker 1: rolling on this week's conversation about taxes and tax season,
2:00
Speaker 1: let's actually take a look back at last week's program
2:02
Speaker 1: and get the question and answer there as well.
2:07
Speaker 4: Yeah, our winner last week was Kevin from Nuclaris and
2:11
Speaker 4: Kevin knew the answer to the question which was true
2:14
Speaker 4: or false. According to a twenty twenty four study by
2:18
Speaker 4: Mass Mutual, the average actual retirement age in the United
2:22
Speaker 4: States is closer to age sixty two, and the answer
2:25
Speaker 4: to that was true. So congratulations Kevin.
2:28
Speaker 1: There we go, my mo my buttons messing with me
2:31
Speaker 1: these days. Really good good work there. Of course, as
2:34
Speaker 1: we talked this morning with our retirement planning professionals, congratulations
2:38
Speaker 1: to Kevin from New Glaris. And you know, tax season,
2:41
Speaker 1: it's we're doing it right now, and of course some
2:44
Speaker 1: tips to help with doing taxes for this year and
2:47
Speaker 1: of course better planning for next year.
2:48
Speaker 2: That's a big deal, isn't it, CJ. It is.
2:52
Speaker 3: Yeah. So you know, many people feel anxious this time
2:54
Speaker 3: of the year, whether it's they're eager to get their
2:57
Speaker 3: refund or their dreading a payment because they didn't pay
3:02
Speaker 3: taxes on on some self employment income. But either way,
3:06
Speaker 3: we are here to help. And today we're just going
3:07
Speaker 3: to give you some kind of tips and reminders about
3:09
Speaker 3: important deadlines and what documents to pull together. Now as
3:14
Speaker 3: we begin this discussion. While Eric and I don't individually
3:18
Speaker 3: file income taxes for clients as of twenty twenty four,
3:22
Speaker 3: so this think of this as the twenty twenty four
3:25
Speaker 3: tax filing season. We actually as an organization have started
3:28
Speaker 3: to prepare income taxes for those clients who want us to.
3:32
Speaker 3: Now it's only for our other clients. It's not just
3:35
Speaker 3: the only thing we do. It would be for our
3:37
Speaker 3: wealth management clients who then also want us to.
3:40
Speaker 2: Do tax prep.
3:40
Speaker 3: But that is something new that we're doing this year.
3:43
Speaker 3: We've hired an enrolled agent who can take care of that.
3:46
Speaker 3: But that being said, the IRS, so just so some
3:49
Speaker 3: important information about your taxes. The IRS started accepting tax
3:54
Speaker 3: returns on January twenty seventh of this year. And this
3:57
Speaker 3: is again for the twenty twenty four tex even though
4:00
Speaker 3: we're in twenty twenty five and the tax filing deadline
4:04
Speaker 3: is April fifteenth of twenty twenty five. Now you can
4:07
Speaker 3: file an extension, and for those who do file an extension,
4:10
Speaker 3: that deadline then it is October fifteenth of twenty twenty five. Again,
4:13
Speaker 3: all these twenty twenty five dates are actually for the
4:16
Speaker 3: prior year's tax return deadlines. One thing we would say
4:21
Speaker 3: is be patient when filing, even though you may have
4:24
Speaker 3: all your tax documents ready to go by January thirtieth
4:28
Speaker 3: and you're just so excited and you send it in
4:30
Speaker 3: and you're like, give me my refund. I want to
4:32
Speaker 3: remind you. The IRS for the twenty twenty three tax
4:36
Speaker 3: year processed over two hundred and thirteen million tax returns,
4:43
Speaker 3: with almost ninety one percent of those actually being filed electronically.
4:49
Speaker 3: So we actually have a couple of clients who do
4:51
Speaker 3: their own taxes and they still do the long for
4:53
Speaker 3: the kind of the free form wed inc document and
4:55
Speaker 3: send it in, but at this point ninety one percent
4:58
Speaker 3: of people are filing those electronically. So the reason we
5:01
Speaker 3: say to be patient is as much as I make jokes,
5:05
Speaker 3: and even in meetings clients can attest, I'll be like, oh,
5:08
Speaker 3: if if you don't pay, they'll throw you in jail,
5:10
Speaker 3: but they don't send you back your money very quickly.
5:12
Speaker 3: That's really more tongue in cheek because at the end
5:15
Speaker 3: of the day, processing two hundred and thirteen million tax
5:18
Speaker 3: returns and all the supporting documents and schedules, that's no joke.
5:22
Speaker 3: That is no joke, and it's gonna take some time,
5:25
Speaker 3: so one thing we would say is be patient. With
5:28
Speaker 3: that being said, by now for those who haven't filed
5:32
Speaker 3: their taxes or sent in all their documents. For most
5:35
Speaker 3: of you, you should have received almost all of your
5:38
Speaker 3: necessary documents from various investments to take to your accountant.
5:42
Speaker 3: And if you haven't, under most circumstances, it's probably sitting
5:46
Speaker 3: on a website somewhere where you could establish a log
5:48
Speaker 3: in and go download it. So we would just encourage you.
5:52
Speaker 3: If you haven't received, say you're consolidated ten ninety nine
5:54
Speaker 3: from a brokerage account at one of your institutions, or
5:58
Speaker 3: an expected WTI too, most of those should have been
6:01
Speaker 3: prepared by now, and therefore we would say reach out
6:05
Speaker 3: to those organizations where you're feeling like you're missing something. Now,
6:09
Speaker 3: with that being said, here's some tax filing tips, and
6:12
Speaker 3: this is for again the twenty twenty four tax filing season.
6:16
Speaker 3: Number one should be obvious. Collect your W two's and
6:19
Speaker 3: ten ninety nine's and various other tax documents things like
6:22
Speaker 3: k ones, and as I said, most of those should
6:25
Speaker 3: be ready to go by now. There could be a
6:29
Speaker 3: couple of exceptions for those of you who are expecting
6:32
Speaker 3: a K one. Sometimes k ones can take a little
6:35
Speaker 3: bit longer. Those can come out in mid March, even
6:38
Speaker 3: in early April, or sometimes things like schedule cues can
6:42
Speaker 3: take longer to receive, so be sure that you have
6:46
Speaker 3: everything pulled together and then provide it to your accountant
6:48
Speaker 3: or start working on your taxes. Another tip would be
6:51
Speaker 3: to maximize your deductions and credits. So check for deductions
6:56
Speaker 3: like student loan interest, medical expenses, or charitable donations. Look
7:00
Speaker 3: into available credits such as the child tax credit or
7:04
Speaker 3: energy efficient home improvements that you did this year. Often
7:07
Speaker 3: those will have tax incentives or tax credits associated with them.
7:11
Speaker 3: You just have to keep track of it and remember
7:14
Speaker 3: when you go to file your income taxes. Now, for
7:16
Speaker 3: those who do like online filing, if they're doing these
7:19
Speaker 3: on their own, often the like turbo taxes of the
7:23
Speaker 3: world will prompt you for questions like this. They will
7:26
Speaker 3: say things like did you install any energy efficient you know,
7:29
Speaker 3: furnaces this year or windows or anything like that, and
7:32
Speaker 3: so it kind of prompts you to say, oh, yeah,
7:34
Speaker 3: that's right, we did do something like that. But if
7:37
Speaker 3: you're filing this kind of long form or free form
7:41
Speaker 3: wet ink you're going to have to remember that, or
7:44
Speaker 3: if you're giving this information to your accountants, you're going
7:47
Speaker 3: to have to notify them because they they can only
7:49
Speaker 3: do what you tell them you did throughout a year.
7:51
Speaker 3: And here's the key, everybody. Most of your core tax
7:56
Speaker 3: like kind of required tax documents come on a tax
8:00
Speaker 3: W two's ten ninety nine s K one schedule cues,
8:04
Speaker 3: but these other things often do not right, like, oh,
8:08
Speaker 3: I gave money to a charity, but I forgot to
8:12
Speaker 3: look for the receipt. Well, unfortunately, if you forgot, you're
8:16
Speaker 3: not gonna be able to even consider a ah, you
8:21
Speaker 3: know that benefit for the charitable contribution for that itemization. Okay,
8:26
Speaker 3: so so some things in your tax documents you're just
8:29
Speaker 3: going to have to remember and notify your accountant and
8:32
Speaker 3: provide receipts if you have it. Some other tips would
8:35
Speaker 3: be you actually can still contribute to things like a
8:38
Speaker 3: traditional ira or a roth ira up until the tax
8:43
Speaker 3: filing deadline, which again is April fifteenth of this year. However,
8:49
Speaker 3: any four to oh one K contributions will have had
8:52
Speaker 3: to be completed by the end of last year in
8:55
Speaker 3: order to count towards last year so just remember four
8:57
Speaker 3: oh one k's four oh three b's. Those are employers
9:00
Speaker 3: sponsored plans. You can only contribute to them, typically out
9:02
Speaker 3: of your earnings, and therefore you can only contribute up
9:06
Speaker 3: till December thirty first, but I raise and wroth irays
9:09
Speaker 3: if you're eligible, those can be contributed to for the
9:13
Speaker 3: prior year, all the way up until the tax filing deadline.
9:18
Speaker 3: And then we would just a couple other quick tips.
9:19
Speaker 3: We would say review prior years returns and tax stocks,
9:22
Speaker 3: because often the easiest way to know if you're missing
9:25
Speaker 3: something is just to go back and look at last
9:26
Speaker 3: year to be like, oh, that's right. Where is where
9:29
Speaker 3: is my consolidated ten ninety nine from Schwab or Fidelity
9:32
Speaker 3: because I don't have that and I still have that account.
9:36
Speaker 3: And then you know, we would encourage you consider e
9:39
Speaker 3: filing and opt for direct deposit of your refund. These
9:43
Speaker 3: things will just help to kind of expedite the process
9:46
Speaker 3: when you when you're waiting for a refund or even
9:49
Speaker 3: in the case where you owe money, it's just better
9:52
Speaker 3: to e file, link up your bank account, pull it
9:55
Speaker 3: out of there, and just be done and move on.
9:57
Speaker 2: Pretty good stuff.
9:57
Speaker 1: As we talk with our retirement playing professionals class and
10:00
Speaker 1: Eric Schwartz don't forget. You can learn more about COSS
10:03
Speaker 1: Financial online cossfinancial dot com. That's Coss k l Aasfinancial
10:08
Speaker 1: dot com. Great website and resource to learn more about
10:11
Speaker 1: cost Financial. They're telephone number six oh eight four four
10:14
Speaker 1: two five six three seven. No charge for that initial
10:17
Speaker 1: get to know you appointment Tax Costs Financial. It will
10:19
Speaker 1: be complementary to you. So Eric, what should we know
10:22
Speaker 1: then when it comes to do our own taxes? Or
10:25
Speaker 1: maybe we should get a tax professional. And the big
10:27
Speaker 1: question is what is a tax professional? Tax prepare?
10:30
Speaker 2: What are they cost in these days?
10:33
Speaker 4: Great questions, Sean, And the short answer is you do
10:36
Speaker 4: have choices. You If you're comfortable doing your own taxes,
10:39
Speaker 4: you certainly can do that. If you have a more
10:42
Speaker 4: complicated return, or you're just not really interested in doing
10:45
Speaker 4: your own taxes, you can also can also hire a
10:47
Speaker 4: tax professional. So let's start here with reasons why you
10:51
Speaker 4: might want to hire a tax professional. I think a
10:54
Speaker 4: pretty obvious one is they are paid to keep up
10:57
Speaker 4: with changing tax laws. Our tax laws are changing all
11:00
Speaker 4: the time, sometimes you know more than annually. And an
11:04
Speaker 4: accountant can you know that's their day job. That's what
11:07
Speaker 4: that's what they're reading about. That's what they're making sure
11:11
Speaker 4: to stay up to date on. Another thing here is
11:13
Speaker 4: they can help you maximize deductions and credits, potentially covering
11:17
Speaker 4: their fees. So CJ was talking about, you know some
11:19
Speaker 4: of these these tax preferred things that you're doing that
11:23
Speaker 4: can help you get a deduction or a credit that
11:25
Speaker 4: don't come on a tax form. You don't you don't
11:27
Speaker 4: think about them. But you know, if your accountant says, hey,
11:30
Speaker 4: I know you did some work on your house. Did
11:32
Speaker 4: you do any you know, energy efficient upgrades or something
11:34
Speaker 4: like that, you know they can help you kind of
11:38
Speaker 4: discover some of these deductions and credits and like I said,
11:40
Speaker 4: potentially cover any additional fee that you're paying them. It
11:44
Speaker 4: definitely saves time. In most cases. The IRS estimates that
11:48
Speaker 4: the average taxpayer spends thirteen hours on their return. I
11:52
Speaker 4: will say to me, that does seem like a really
11:54
Speaker 4: long time. Those must be some complicated returns. But the
11:58
Speaker 4: accountant can help you cut down some of that. They
12:01
Speaker 4: can they can provide you with expert answers without having
12:04
Speaker 4: to wait for an answer from the I R. S.
12:07
Speaker 4: So if you can ask the accountant rather than trying
12:09
Speaker 4: to get in touch with with.
12:11
Speaker 2: The I R S.
12:12
Speaker 4: That's also going to save you some time, minimize stress,
12:15
Speaker 4: reduce costly mistakes. And I think one of the more
12:19
Speaker 4: the more important benefits you get from working with the
12:23
Speaker 4: tax preparer is they can give you tax planning tips
12:26
Speaker 4: kind of all year long, not just at tax time. Oftentimes,
12:30
Speaker 4: when you're meeting with the accountant in you know, March
12:33
Speaker 4: or April, you're you know, you're already what's done is done.
12:37
Speaker 4: You can't go back and make some changes to help
12:40
Speaker 4: yourself on the tax return. So if you have someone
12:42
Speaker 4: to advise you throughout the year, there's a lot of
12:44
Speaker 4: value in that. They can also look back at your
12:47
Speaker 4: past returns. They can they can look for missed deductions
12:51
Speaker 4: or potential errors, and all of this is just going
12:53
Speaker 4: to help reduce your audit risk and you know, make
12:56
Speaker 4: sure you're not paying any more than you have to
12:58
Speaker 4: for your for your annual income tax. Now, from a
13:03
Speaker 4: cost perspective, right, all these things sound great, but what
13:06
Speaker 4: is it costing me relative to doing it on my own?
13:09
Speaker 4: So current trends show us that the average cost of
13:12
Speaker 4: tax preparation varies by you know, the complexity, the firm
13:17
Speaker 4: you're working with, your location. But according to the National
13:21
Speaker 4: Society of Accountants, the average fee for filing an individual return,
13:25
Speaker 4: so that's Form ten forty without any itemized deductions, is
13:29
Speaker 4: about two hundred and twenty dollars versus an itemized return,
13:33
Speaker 4: which is closer to three hundred and twenty three dollars.
13:36
Speaker 4: And for more complex tax situations so I think, you know,
13:40
Speaker 4: self employed, maybe you have to file in multiple states,
13:43
Speaker 4: the fees can be more than five hundred and fifteen
13:46
Speaker 4: dollars for complete service tax preparation. Now, what I'll say
13:51
Speaker 4: about these numbers is CGN I work with clients here
13:54
Speaker 4: and well in the Madison market and around the country.
13:58
Speaker 4: I would say these numbers seem a little low to
14:00
Speaker 4: me for our local our local community. But the interesting
14:05
Speaker 4: thing is pricing varies widely. You know, even just here
14:09
Speaker 4: in our in our local community. You know, we'll have
14:11
Speaker 4: one accountant that works with a certain type of return
14:14
Speaker 4: and it'll cost you know, maybe four hundred and fifty
14:17
Speaker 4: dollars in the same return with another accountant might be
14:19
Speaker 4: eight hundred dollars. Right, It really really varies. So I
14:24
Speaker 4: want to make sure that we're asking those questions upfront
14:26
Speaker 4: and doing our homework when we're when we're looking at
14:29
Speaker 4: hiring an accountant. Now, there may be some free filing options. Okay,
14:33
Speaker 4: so IRS does have something called the IRS Free File.
14:37
Speaker 4: If your AGI is eighty four thousand dollars or less,
14:40
Speaker 4: you actually qualify for guided tax software through the IRS.
14:44
Speaker 4: There are also just the free file fillable forms, so
14:48
Speaker 4: just fillable PDFs to fill in your your tax information
14:52
Speaker 4: basically like like doing it yourself with a with a
14:56
Speaker 4: pen paper, but it does allow you to file it.
14:59
Speaker 4: This is available for all incomes, but it does require
15:01
Speaker 4: that you have some tax knowledge. There's no nobody asking
15:05
Speaker 4: questions in guiding you. And then you know H and
15:08
Speaker 4: R Block or TurboTax. They will often have what they
15:11
Speaker 4: call their free versions. This offers kind of basic federal
15:16
Speaker 4: tax prep in most cases. Generally, if you have itemized
15:19
Speaker 4: deductions or self employment income, you're going to sort of
15:23
Speaker 4: quickly move into the paid versions, and you know, when
15:28
Speaker 4: it comes to filing state returns, they'll often they'll often
15:30
Speaker 4: charge you for that. Now, if you do want to
15:33
Speaker 4: do it yourself, but you do want a little bit
15:34
Speaker 4: of guidance going through the paid versions of a Turbo
15:38
Speaker 4: tax or an H and R block, those will generally
15:41
Speaker 4: cost between seventy dollars and two hundred dollars, although I'll
15:44
Speaker 4: say they're they're kind of adding services that that you
15:48
Speaker 4: can pay more for. So oftentimes you really need to
15:51
Speaker 4: think about how much you're actually saving by paying for
15:54
Speaker 4: a tax software and doing it all yourself.
15:56
Speaker 2: Really good information. Good to get some of those numbers.
15:58
Speaker 1: I guess it's interesting about the how much it costs
16:01
Speaker 1: and how and how varied those costs are. Is that
16:05
Speaker 1: is fascinating for sure. Talking this morning with Eric Schwartz
16:08
Speaker 1: and CJ.
16:08
Speaker 2: Closs.
16:09
Speaker 1: They are our retirement planning professionals from Class Financial. Their
16:12
Speaker 1: website coss financial dot com. That's coss k l a
16:16
Speaker 1: a s Financial dot com. Great website and resource to
16:19
Speaker 1: learn more about COSS Financial. Also, if you missed any
16:21
Speaker 1: part of today's program or you want to get caught
16:23
Speaker 1: up with previous shows, you can listen to as well
16:25
Speaker 1: as subscribe to the podcast right at cossfinancial dot com. Again,
16:29
Speaker 1: that website Coss k l a a S Financial Financial
16:32
Speaker 1: dot com. Telphone number six O eight four four two
16:35
Speaker 1: five six three seven no charge that initial gets to
16:37
Speaker 1: know the appointment deck Class Financial. It will be complementary
16:40
Speaker 1: to you well to your conversation with Cjen. Eric next
16:43
Speaker 1: has money in Motion with Coss Financial. Continues here on
16:45
Speaker 1: thirteen ten Wi b A talking with our retirement planning
16:49
Speaker 1: professionals from Coss Financial CJ. Closs and Eric Schwartz. Of course,
16:52
Speaker 1: you can learn more about Colass Financial on the website
16:55
Speaker 1: Coss financial dot com. That's Coss k l a A
16:58
Speaker 1: S Financial dot com. Telling for number six oh eight
17:01
Speaker 1: four four two five six three seven. No charge for
17:04
Speaker 1: that initial get to know the appointment deech Loss Financial.
17:07
Speaker 1: It will be complimentary to you again their number six
17:09
Speaker 1: oh eight four four two five six three seven. Talking
17:12
Speaker 1: taxes this week, talked about some great tips for doing
17:16
Speaker 1: your taxes this year, and let's take a look ahead
17:19
Speaker 1: and kind of, you know, once we get this year
17:21
Speaker 1: taken care of, how can we start looking towards twenty
17:23
Speaker 1: twenty five in the of course this year and next year,
17:27
Speaker 1: and of course simple things to maybe simplify taxes for
17:31
Speaker 1: next year or ways to save more.
17:33
Speaker 2: CJ.
17:34
Speaker 1: I'm gonna leave this one with you because there's a
17:36
Speaker 1: lot going on here, isn't there?
17:38
Speaker 3: There is so just a little bit of history, even
17:41
Speaker 3: for myself everybody. So I when I first got into
17:44
Speaker 3: this industry, taxes was not my strong suit. I have
17:49
Speaker 3: dramatically increased my kind of tax awareness and tax knowledge
17:53
Speaker 3: in the last twenty years of doing this, but initially
17:57
Speaker 3: it wasn't a kind of a high understanding form. So therefore,
18:01
Speaker 3: even in my own tax returns twenty some years ago,
18:04
Speaker 3: it was super stressful. I didn't know what the Turbo
18:09
Speaker 3: tax website was asking me about. I didn't know where
18:12
Speaker 3: to get copies of the things that I had bought.
18:15
Speaker 3: I wasn't saving anything throughout the year, and so when
18:17
Speaker 3: it came to tax time, I would just sweat profusely.
18:21
Speaker 3: Not so much because I was doing anything wrong, but
18:24
Speaker 3: rather I didn't know what to expect. I didn't know
18:26
Speaker 3: if I was going to owe money or get money back.
18:28
Speaker 3: I didn't know where any of the documents were or
18:31
Speaker 3: what it just this kind of like lack of knowledge
18:33
Speaker 3: or lack of understanding drives fear and anxiety. We've talked
18:37
Speaker 3: about this on the show before, so over time I
18:41
Speaker 3: just kind of paid attention, like, oh, okay, I need
18:45
Speaker 3: to beware of these W two's and these ten ninety
18:48
Speaker 3: nine's and oh, my mortgage interest matters, and if I'm
18:51
Speaker 3: going to give money to charities, I should notate that somewhere,
18:54
Speaker 3: and then I should look for the receipts at the
18:56
Speaker 3: end of the year. And so I just started creating
18:58
Speaker 3: an electronic fula called twenty twenty four taxes or twenty
19:02
Speaker 3: twenty five taxes, and I would just dump as I
19:06
Speaker 3: got things throughout the year that I knew I would
19:09
Speaker 3: need or even might need. When I go to file
19:11
Speaker 3: my income taxes, I would just dump the electronic file
19:13
Speaker 3: in there. Now, this is the version that worked for me.
19:17
Speaker 3: Your version might be a physical file at home, where
19:20
Speaker 3: it's a physical file called twenty twenty five taxes. So
19:23
Speaker 3: now we're done talking about last year's taxes. Now we're
19:25
Speaker 3: talking this year. So you might create a physical file
19:28
Speaker 3: and you might just dump some of your papers in
19:30
Speaker 3: there as you do things throughout the year. But here's
19:34
Speaker 3: what I'd say, just to give you hope for those
19:36
Speaker 3: of you who have fear or anxiety around filing taxes.
19:40
Speaker 3: I went from not knowing what to expect, not knowing
19:43
Speaker 3: what documents I needed to now I have zero anxiety.
19:50
Speaker 3: Zero Legitimately I know within a few hundred dollars if
19:55
Speaker 3: I'm going to get money back or oh, and I
19:58
Speaker 3: know why, and if I didn't want, you know, oh,
20:00
Speaker 3: I know how to pay more. And now I do
20:04
Speaker 3: have an accountant that actually files the tax return for me,
20:08
Speaker 3: but legitimately even the file or the account in doing
20:12
Speaker 3: that is really just I want somebody who's in the industry.
20:15
Speaker 3: I could do it myself and have just zero anxiety.
20:18
Speaker 3: Now some of you are rolling your eyes going, well, yeah,
20:20
Speaker 3: because you're in the industry, that's true, touche. I'm with you.
20:24
Speaker 3: I get to see more of this and understand it more.
20:27
Speaker 3: But we have walked many of our clients through this
20:30
Speaker 3: just to say, hey, here's the document, set up the folder,
20:32
Speaker 3: do this, do this, and over the course of about
20:35
Speaker 3: three or four or five years, people go, oh.
20:37
Speaker 2: I get it.
20:38
Speaker 3: This is not complicated. So with all of that kind
20:41
Speaker 3: of like story out of the way, let me just
20:43
Speaker 3: give you some some tips. Number One, if you owed
20:47
Speaker 3: in twenty twenty four the last year, a just year
20:50
Speaker 3: withholding on your income sources, this is a simple one, like, oh,
20:54
Speaker 3: I'm working still and I owed five thousand dollars. That
20:57
Speaker 3: was not fun. It means you're not withholding enough. And
21:00
Speaker 3: if you're not working and you still owed, then you
21:02
Speaker 3: might want to increase your withholding on your pensions, Social
21:05
Speaker 3: Security or IRA distributions. There's one simple things. Number two,
21:10
Speaker 3: track your expenses and deductions throughout the year. I kind
21:14
Speaker 3: of already mentioned this, but just do it throughout the
21:15
Speaker 3: year and put it in a folder. Number three, maximize
21:20
Speaker 3: your retirement account contributions if you're still working, and your
21:23
Speaker 3: HSA contributions if you're still working. And consider because some
21:26
Speaker 3: people will meet with them and they'll go, oh, I'm
21:28
Speaker 3: just I'm always owing at the end of the year
21:31
Speaker 3: and it's just really frustrating, and we go, well, one
21:35
Speaker 3: of two things, either increase your payroll deduction with holdings
21:39
Speaker 3: or number two, oh, you're putting money into the wroth
21:42
Speaker 3: for a one k, just swap that around and put
21:45
Speaker 3: it into the pretax for one K. Now, I'm oversimplifying
21:48
Speaker 3: that decision, by the way, it does have to be
21:51
Speaker 3: back up by some academic research that you need to
21:53
Speaker 3: do with an advisor. But the point being, we often
21:56
Speaker 3: find the anxiety that people have around their taxes at
22:00
Speaker 3: the end of the year are super super super easy
22:03
Speaker 3: fixes change this change that, boom, We're done. Another one
22:07
Speaker 3: would be stay up to date on tax law changes. Now,
22:10
Speaker 3: Eric and I would both attest, yeah, you do want
22:12
Speaker 3: to do this. I mean, we have to do this professionally.
22:14
Speaker 3: But I would just say it's pretty hard to stay
22:16
Speaker 3: up to date on tax law changes because you have
22:19
Speaker 3: to be able to decipher what is a rumor versus
22:23
Speaker 3: what is law. Let me give you an example of this.
22:26
Speaker 3: There is a rumor, you know, based upon fact, there
22:29
Speaker 3: is a rumor that Donald Trump and Kamala Harris when
22:33
Speaker 3: she was running for office, both wanted to remove taxes
22:37
Speaker 3: the tax ability of Social Security at a federal level.
22:41
Speaker 3: I just want to say, soci Security income will not
22:42
Speaker 3: be taxable. That is not law right now. That may
22:46
Speaker 3: become law, that is not law right now. So this
22:50
Speaker 3: can be a tough one. You've got to be able
22:51
Speaker 3: to separate rumor from reality. And then that's often why
22:54
Speaker 3: we would say you might eventually want to have an
22:56
Speaker 3: accountant who can do this professionally, or at least have
22:59
Speaker 3: your advice. You know, be able to decipher what has
23:02
Speaker 3: been passed and what is not, which leads into the
23:05
Speaker 3: next one. You might want to consider working with a
23:07
Speaker 3: tax professional. I understand it's going to be more expensive.
23:11
Speaker 3: I understand you might pay three to six hundred dollars
23:14
Speaker 3: for a standard return, somewhere in that range. But my
23:17
Speaker 3: comment would be, if that accountant can help you understand
23:20
Speaker 3: what to prepare file the income taxes, make you prepared
23:24
Speaker 3: for knowing what to expect, I'd say it's some of
23:27
Speaker 3: the best money you'll spend throughout the year. And then, finally,
23:30
Speaker 3: I already mentioned this at the beginning, but let me
23:32
Speaker 3: just re emphasize it again. Create your twenty twenty five
23:36
Speaker 3: tax file now and start tracking all of your charitable
23:40
Speaker 3: giving all of your purchases that have tax benefits associated
23:46
Speaker 3: with it, for energy efficiency or whatever it might be.
23:49
Speaker 3: And by the end of this year, you will be
23:51
Speaker 3: so thankful that you did.
23:53
Speaker 1: It's a little gift you can give yourself for the
23:55
Speaker 1: end of the year. It is interesting once you start
23:58
Speaker 1: doing this and CG. I think you'll lay it out perfectly.
24:01
Speaker 1: Not only are you doing yourself a huge favor, but
24:03
Speaker 1: you start to kind of see the bigger picture and
24:05
Speaker 1: kind of understand some of the benefits, and of course
24:08
Speaker 1: can put together a strategy, just like any game plan.
24:11
Speaker 1: Have that strategy put together. It's so important to start
24:14
Speaker 1: that conversation.
24:15
Speaker 2: Great day.
24:15
Speaker 1: As we talked this morning with CJ. Closs and Eric Schwartz,
24:18
Speaker 1: our retirement planning professionals from Class Financial, great data, start
24:21
Speaker 1: that conversation. They're telephon number six So eight four four
24:23
Speaker 1: two five six three seven. Don't forget no charge for
24:26
Speaker 1: the initial gets to no appointment that loss Financial. It
24:28
Speaker 1: will be complimentary to you again their number six oh
24:30
Speaker 1: eight four four two five six three seven. So, Eric,
24:34
Speaker 1: what about some folks. I know there's probably people listening
24:36
Speaker 1: saying do I actually need to file a tax return?
24:39
Speaker 1: And of course how long should we hold on to
24:42
Speaker 1: those old old tax returns?
24:45
Speaker 4: Yeah, that's another great question. And no, not everyone is
24:48
Speaker 4: required to file taxes. So if you're in if your
24:51
Speaker 4: taxable income is low enough, you are not required to.
24:55
Speaker 4: In twenty twenty four, for single folks, the income threshold
25:00
Speaker 4: for filing an income tax return is fourteen six hundred dollars.
25:05
Speaker 4: If your income is below that threshold, you generally do
25:08
Speaker 4: not need to file a federal return. But please check
25:12
Speaker 4: with a tax professional before you just decide not to
25:15
Speaker 4: file anything, and get some guidance on your own situation,
25:19
Speaker 4: and even if your income is low, there are certain
25:21
Speaker 4: benefits that can come from filing your taxes. You know,
25:25
Speaker 4: you might be able to claim tax credits that are refundable,
25:28
Speaker 4: which means you know they actually even if you don't
25:31
Speaker 4: owe taxes, they would they would be a financial benefit
25:34
Speaker 4: to you. And any overpayment that you that you made
25:37
Speaker 4: from withholding throughout the year, you want to make sure
25:40
Speaker 4: you get that back you need you need to file
25:42
Speaker 4: a return to do that. And regarding the keeping of
25:45
Speaker 4: your old tax returns, the IRS tells us that you
25:49
Speaker 4: should keep tax records for three years from the date
25:52
Speaker 4: you filed your original return or two years from the
25:55
Speaker 4: date you paid the tax, whichever is later. And when
26:00
Speaker 4: I say tax tax records, we're talking about, you know,
26:04
Speaker 4: the supporting documentation for your return, so receipts from a
26:08
Speaker 4: charitable organization or a ten ninety nine or whatever it
26:11
Speaker 4: might be. You should keep records for seven years whenever
26:16
Speaker 4: you're you're claiming a loss on your tax return, and
26:20
Speaker 4: you should keep tax records indefinitely if you did not
26:23
Speaker 4: file an income tax return. The IRS generally audits within
26:28
Speaker 4: three years, but if they want to they can they
26:31
Speaker 4: can definitely go go back as far as six years.
26:34
Speaker 1: Really good guidance this morning in important years to keep
26:37
Speaker 1: in mind. As we talked this morning with Eric Schwartz
26:40
Speaker 1: and CJT.
26:40
Speaker 2: Coloss.
26:41
Speaker 1: They are our retirement planning professionals from Closs Financial. Learn
26:44
Speaker 1: more online the website Coss Financial dot com. That's coss
26:48
Speaker 1: k l a as Financial dot com and they're telephone
26:51
Speaker 1: number six, So eight four four two five six three seven.
26:54
Speaker 1: We'll head on over and check out the Money and
26:56
Speaker 1: Motion listener question corner as well as do the class
26:59
Speaker 1: quiz question leak. We'll do that with you next as
27:01
Speaker 1: Money in Motion with Class Financial continues here on thirteen
27:04
Speaker 1: ten wiv A talking this morning with CJ.
27:07
Speaker 2: Closs and Eric Schwartz.
27:08
Speaker 1: Of course, they are our retirement planning professionals from Class Financial.
27:11
Speaker 1: You can learn more about Class Financial their website class
27:14
Speaker 1: Financial dot com. That's coss k l aas Financial dot
27:18
Speaker 1: com and they're telephone number six, So eight four four
27:20
Speaker 1: two five six three seven. We have to the Class
27:23
Speaker 1: quiz close Question of the week and just a moment,
27:25
Speaker 1: but first it's the Money in Motion listener question corner
27:28
Speaker 1: and Coreen right sin she says, I'm retiring next year
27:31
Speaker 1: when I'm sixty two one would be the best time
27:34
Speaker 1: to start collecting my Social Security benefit.
27:37
Speaker 4: CJ.
27:37
Speaker 2: I'll leave this one with you.
27:40
Speaker 3: Yeah, well, great question. I appreciate you you submitting that question, Kareen,
27:44
Speaker 3: And just a good reminder to everybody. You can go
27:46
Speaker 3: to our website and submit any question that you want,
27:48
Speaker 3: or of course you can call into the show and
27:50
Speaker 3: air your question live as well. But crean to answer
27:53
Speaker 3: your question. Yes, if you're if you're going to be
27:55
Speaker 3: turning sixty two, you're starting to think about social Security one,
27:58
Speaker 3: should you draw it? And and if you've listened to
28:01
Speaker 3: our show, you know that the answer is it depends.
28:06
Speaker 3: Every good answer begins with it depends. Now, if you
28:09
Speaker 3: want an individual answer, talk to your account and talk
28:12
Speaker 3: to your financial advisor and they should be able to
28:14
Speaker 3: sit down and look at all. Right, are you still working?
28:16
Speaker 3: So let me just give you high level. Here's why
28:19
Speaker 3: we have to say it depends. If you draw at
28:22
Speaker 3: sixty two Korean, you're limited on how much you can
28:26
Speaker 3: earn separately from that at a W two paying job.
28:30
Speaker 3: If you earn too much, then they actually start reducing
28:33
Speaker 3: your Social Security benefits. So you know there would be
28:36
Speaker 3: an example of why you have to you know, somebody
28:39
Speaker 3: has to ask some questions about this, and then beyond that,
28:42
Speaker 3: like are you married, is your spouse drawing Social Security?
28:47
Speaker 3: Is there any spousal benefit available, any former widow's benefits?
28:52
Speaker 3: Is there a value in delaying your Social Security draw
28:56
Speaker 3: D eight till your full retirement age or maybe even
28:58
Speaker 3: up until age seventy to get those delayed retirement credits
29:01
Speaker 3: of eight percent? Of course, things like health concerns come in.
29:04
Speaker 3: Are you healthy or are you unhealthy? How long did
29:06
Speaker 3: your parents live? All of these things, believe it or
29:10
Speaker 3: not impact our advice around around when to draw soal security.
29:16
Speaker 3: Now again, some people go, oh, my goodness, you're over
29:18
Speaker 3: complicating this. Not really, In about a ten minute conversation,
29:23
Speaker 3: we can boil down to some pretty clear general guidance
29:28
Speaker 3: on when you should draw. So this isn't doesn't have
29:30
Speaker 3: to be an hour long conversation, but in about ten
29:32
Speaker 3: minutes with somebody who knows what they're doing, who has
29:35
Speaker 3: experienced like we do, you can just whittle it down
29:38
Speaker 3: to say, seems like, well, from what you're telling me,
29:40
Speaker 3: somewhere between sixty five and sixty eight would be ideal
29:43
Speaker 3: and we'll just reevaluate it when you get there. So, Karin,
29:46
Speaker 3: I hope that's helpful. I realize I'm not answering your
29:49
Speaker 3: question specifically because the answer to your question is I
29:53
Speaker 3: don't know. It depends. But for all of you listening
29:55
Speaker 3: out there, make sure you're talking with somebody about when
29:59
Speaker 3: to draw SOL security because it matters.
30:02
Speaker 1: Very important decision there, and great question, Karine, don't forget
30:05
Speaker 1: You too can be like Areena CJ mentioned. You can
30:07
Speaker 1: submit a question right online at Class's website class Financial
30:11
Speaker 1: dot com. That's coss k l a as Financial dot Com.
30:15
Speaker 1: Telph number for Class Financial Office right here in Madison
30:17
Speaker 1: sixt' oh eight four four two five six three seven
30:20
Speaker 1: if you want to hold on to that telephon number
30:21
Speaker 1: because it's time out for the Class Quiz question the week.
30:23
Speaker 1: It works like this, In just a moment, I'll ask
30:25
Speaker 1: you the Class Quiz question the week. You will then
30:27
Speaker 1: have thirty minutes from the today's program to call the
30:29
Speaker 1: Class Financial Office right here in Madison at six oh
30:31
Speaker 1: eight four four two five six three seven. If you
30:34
Speaker 1: are the first call with correct answer, win this week's prize,
30:36
Speaker 1: which is a twenty five dollars gift card to the
30:38
Speaker 1: Darden Restaurants to the Class Quiz question week This week
30:42
Speaker 1: is this true or false? You can make a twenty
30:46
Speaker 1: twenty four contribution to an IRA up until April fifteenth
30:51
Speaker 1: of this year. Is that true or is that false?
30:54
Speaker 1: Telephone number six oh eight four four two five six
30:57
Speaker 1: three seven first cost correct answer win this week's prize.
31:00
Speaker 2: Don't forget as well.
31:00
Speaker 1: That's Class Financials Office right here in Madison, that number
31:03
Speaker 1: six O eight four four two five six three seven CJ.
31:07
Speaker 2: Eric. It's always great chatting with both of you guys.
31:09
Speaker 2: Have a fantastic day, Thanks Sean, Thanks Sean, and.
31:13
Speaker 1: Uh Marty Greer. Check out Veterinary. She comes your way
31:15
Speaker 1: next year on thirteen ten WIB eight